Vehicle emission targets and fair competition in aviation are two files on which the EU legislative agenda demands progress this fall.

For the first, there’s deadlock in Brussels over how to balance the EU’s green ambitions for the automobile industry while keeping Europe’s employment engine ticking over. The dispute rests on how to configure carbon dioxide reduction targets for emissions for cars, vans and, in a separate piece of legislation, the bloc’s first ever truck standards for 2030.

MEPs are set to seal their take on cars and vans in committee September 10, paving the way for trilogue talks after ministers in the Council set their position in October.

The Parliament’s lead environment committee wants to push for a 50 percent reduction. That's way above the draft goals proposed by the Commission, which is aiming for a 30 percent cut by 2030, with an interim target of 15 percent by 2025. The transport committee backed the Commission’s position in a vote in July.

The Council is heavily split between countries with a strong auto industry and those betting on electric vehicles.

Setting the level of ambition is a political nightmare: Carmaking countries warn of the impact rapid electrification will have on labor markets, while conceding policy carrots are needed to spur innovation. With 820,000 workers directly employed by the automotive industry in Germany, national labor union IG Metall said a third of those jobs would be lost if electric cars make up 40 percent of sales.

Environmental groups say strong EU targets are crucial to nudge the auto industry into an electric age. The transport sector accounts for about a quarter of CO2 emissions. If Europe is to meet its greenhouse gas reduction targets, those emissions need to fall by two-thirds by 2050 compared with 1990 levels.

Protecting EU airlines

The Commission, Parliament and Council will also tussle over a bill known as Regulation 868/2004, which would empower the EU to act against non-EU airlines it suspects are being aided unfairly by their governments.

The proposed bill is heavily supported by Lufthansa and Air France-KLM, which have seen their share of profits shrink as Gulf airlines like Emirates, Etihad and Qatar Airways expand their footprint in Europe. The initial proposal would have allowed the EU to block certain flights, routes and their frequency — collectively known as traffic rights — in addition to imposing fines on airlines it suspects of wrongdoing.

But after a push by Europe's peripheral states, including Finland, Ireland, Poland and Greece, the Council adopted a much-amended bill in June that would limit the measures the Commission can take.

The Council, under the leadership of the Bulgarian presidency, ruled out measures that would affect traffic rights and imposed a Union interest test to halt proceedings if the EU28 believes action will do more harm than good. EU countries also deleted the Commission's ability to pursue a case before harm from the unfair aid is done.

The Parliament’s version of the proposal is more closely aligned with the Commission's, setting the stage for a showdown as the Council and MEPs try to agree on a common position. For Parliament, both the threat to injury and traffic rights are red lines, according to the bill's rapporteur, German conservative MEP Markus Pieper.

The Commission will fight to maintain a bill as close to the original proposal as possible. The Austrians, now in charge of the Council's rotating presidency, are also worth watching as they support stronger rules than those EU countries settled on. (Austrian Airlines is owned by Lufthansa.)